Emergency Credit Line Guarantee Scheme (ECLGS)

About Emergency Credit Line Guarantee Scheme (ECLGS):

• It was launched by the Government of India in 2020 as a special scheme in view of the Covid-19 crisis.
• Objective: To provide 100 percent guaranteed coverage to the banks, non-banking financial institutions (NBFCs), and other lending institutions to extend emergency credit to business entities that have suffered due to the Covid-19 pandemic and are struggling to meet their working capital requirements.
• ECLGS is under the operational domain of the Ministry of Finance, Department of Financial Services (DFS).
• National Credit Guarantee Trustee Company Ltd (NCGTC) has been set up by the Union Ministry of Finance to manage and provide guarantees to these loans.
• ECLGS was launched in different phases - ECLGS 1.0, ECLGS 2.0, ECLGS 3.0, and ECLGS 4.0. In different phases, the scope of this scheme was increased to include multiple sectors.
• Sanctions/disbursements are made by lending institutions based on assessment of the borrower’s requirements and eligibility.
• Processing charges, foreclosure, and prepayment charges are waived under the scheme.
• No collateral is required for this scheme.
• ECLGS 1.0:
  • Under the scheme, borrowers could avail of additional credit of up to 20 percent of their overall outstanding credit as on February 29, 2020.
  • Eligibility: Business Enterprises/MSMEs with outstanding loans of up to Rs 25 crore as of February 29, 2020, with an annual turnover cap of Rs 100 crore for the financial year 2019-2020.

 

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Q1) What is the National Credit Guarantee Trustee Company Ltd (NCGTC) ?

NCGTC is a Union Government Company. It's a private company and is classified as a company limited by shares'. It is majorly in Finance business and currently, company operations are active.Company is registered in Delhi (Delhi) Registrar Office.

Source: Centre mulls possible extension of ECLGS